Gotion High-Tech reveals intention to build battery manufacturing JV in U.S.

Shanghai (Gasgoo)- Gotion High-Tech Co.,Ltd. (the “Company”) announced on Dec. 20 its wholly-owned sub-subsidiary, GOTION, INC. has deepened the cooperation with its client, a large-sized publicly listed U.S.-based automobile company (the “Client”), by signing a strategic supply and localization agreement (“the Agreement”).

The Company said in this statement it will export LFP batteries, manufactured at its production factories in Chinese mainland, based on the Client's demands. Besides, both parties will co-work on the localization of battery production and supply in the U.S., and jointly explore the possibility of building a joint venture. The LFP batteries will be used for the Client's EVs sold in the U.S. and even worldwide.

Per the Agreement, within sixth years ended 2028, GOTION, INC. should provide batteries sufficient to the Client's demands, which is estimated to amount to at least 200GWh.

GOTION, INC. agreed to allocate Gotion High-Tech's existing capacities and the capacities under construction in China, as well as the yet-to-be-built ones in the U.S. to satisfy the Client's procurement demands.

Besides, the Client will make advance payment to GOTION, INC. in installments to support the latter in paying construction costs, purchasing facilities, and other businesses related to building factory in the U.S. Part of the payment for goods can be deducted from the advance payment as well.

Moreover, both parties will have discussions over the establishment of a joint venture, which may engage in the investment in the recycling of upstream materials and downstream batteries.

Signing the agreement is conducive to cementing the long-term strategic cooperation between the Company and the Client, said Gotion High-Tech. The latest announcement shows that GOTION, INC. didn't not transact business with the Client from 2018 and 2020.